WAEC Past Questions and Answers - Page 845

4,221.

An item that would be classified as preliminary expenses in a company's account is

A.

Formation expenses

B.

Administrative expenses

C.

Distribution expenses

D.

General expenses

Correct answer is A

Preliminary expenses are expenses expended in the formation of a company. They are referred to as formation expenses and it is a part of the fictitious assets of a company.

4,225.

Resources owned and controlled by a business are classified as

A.

Assets

B.

Capital

C.

Liabilities

D.

Drawings

Correct answer is A

Assets are the resources or properties of a business organization e.g. land and building, premises, motor van etc. It is calculated as Asset =Capital + Liabilities.